Is there hope for government postal services?

In Sri Lanka, the window for saving the post has probably closed. According to the latest Household Survey, a Sri Lankan household spends LKR 4/month on postal services and LKR 750/month on telecom services. You cannot build a viable business on that kind of money. There will always be a need to deliver packages (until teleporting is perfected), but this can be done by agile courier services, not the bloated government post office.

Now that the US postal service is almost bankrupt, everyone is looking at Europe. But it looks like they’ve saved the post office by making it something else.

With mail volumes decreasing 1 to 2 percent annually in many countries, European postal services from Germany to Sweden to Switzerland have reinvented themselves over the past decade as multifaceted delivery and information companies tailored to the virtual age. Though Deutsche Post by law still delivers to every address six days a week, it has jettisoned tens of thousands of buildings, 100,000 positions and its traditional focus on paper mail.

“We realized that being a national postal provider was an endangered business, that we had to redefine the role of postal providers in a digital world,” said Clemens Beckmann, executive vice president of innovation of the German post office’s mail division.

But it seems to me that one has to start from elements of reality, such as the daily loss of the post office (LKR 4.5 million/day in 2006: http://lbo.lk/fullstory.php?nid=545475263; possibly more now); the substitution effects as shown by the LKR 4:750 ratio for post:telecom; the failure to deal with corporate mail in a sensible way; the fate of reformers, etc. Blue-sky speculation will remain speculation otherwise.